How to Sort Out the Legal Requirements for the Various Types of Association Meetings
Since the early 1990s, community associations in New Jersey have been legally required to operate “in the sunshine” by virtue of amendments to the Condominium Act, the Planned Real Estate Development Full Disclosure Act (PREDFA), and regulations promulgated by the Department of Community Affairs. Many board members are still confused about the types of meetings that associations conduct as well as the characteristics and legal requirements of each. This blog is about the different types of meetings. In future blogs, the legal requirements for notice of meetings and proper meeting minutes will be discussed.
It is important initially to distinguish board meetings from membership meetings. Membership meetings are those meetings authorized or required by the governing documents at which the unit owners or homeowners are the decision-makers. The most obvious example of a membership meeting is the annual meeting, where the members decide who will be elected to the board of trustees/directors. Meetings where owners vote on a proposed by-law amendment or the approval of a capital improvement project are other actions taken at membership meetings. The governing documents generally specify the issues for which owner approval is necessary. In some associations, the annual meeting is the only required membership meeting, but most documents also provide for special meetings of the members to be called by the board or by petition of the members to deal with specific issues. Because meetings of the members are “open” by definition, community association open meetings laws do not address membership meetings but rather concern meetings of the governing board.
Board meetings are those at which the decision-making body is the board of directors or trustees. Just as the governing documents define those questions or decisions reserved to the members, they define the authority of the board to act as well. For example, the authority to make rules, enter into contracts, hire employees, and determine the annual assessment generally is granted to the board by the master deed (or the declaration) and by-laws.
There are three basic types of board meetings: (1) business (open) meetings; (2) work sessions; and (3) executive (closed) sessions. Each type of meeting may be “regular” (periodic and regularly scheduled) or “special” (called when there is a special need or emergency between regular meetings).
Business (open) meetings are those at which the general business of the association is conducted and binding votes are taken by the board. These are the meetings that must be open to the members. A “work session” or “workshop” is a meeting of the board at which no binding votes are taken. For example, a meeting to go over the proposed budget with management is a work session. Similarly, a meeting with a landscaping contractor to go over a deficiency list is a work session. In addition, a work session may be used to set the agenda for an open board meeting. Since no votes are taken and no decisions binding the association are made, attendance by owners is not mandated. A board may invite owners to attend, but it is not required by the law.
In contrast to a work session, an executive session is a closed meeting that can involve decision-making. The executive session is defined by the topics discussed. The topics that are considered confidential and may be handled in closed session are generally: (1) privacy issues; (2) litigation or contract negotiations; (3) attorney-client advice; and (4) personnel issues. The board may discuss and make decisions regarding these specific types of matters at the executive session without opening those meetings to the members.
The difference between a work session and an executive session is that a work session can involve any topic, but no decisions can be made, while the executive session involves specific confidential matters and decisions on those matters may be made. Be careful, however, because although contract negotiations can be discussed in an executive session, the approval of contracts must be done at an open business meeting.
For more information on this or any other issue concerning your community association, please contact one of our Community Associations attorneys. For breaking news or updates on new blog posts, follow us on Twitter at: @njcondolaw, on Facebook at: njcondolaw, and on LinkedIn at: Hill Wallack Community Association Attorneys.